James Cropper PLC on Wednesday said it expects profit to fall but revenue to rise on annual basis, while it announced a strategic reorganisation of its operations.
Shares in James Cropper were up 8.7% to 625.00 pence each in London on Wednesday at midday.
The Cumbria, England-based advanced materials, luxury packaging and paper products provider said it expects adjusted pretax profit of no less than £2.2 million in the financial year ended April 1, exceeding market expectations of £2.0 million.
In financial 2022, it reported an adjusted pretax profit, excluding IAS19 and exceptional items, of £4.0 million. The expected adjusted pretax profit figure would therefore represent a fall of 45% against the previous year.
After the impact of IAS19 on its income statement and exceptional items, it recorded a pretax profit of £2.8 million in financial 2022, up 65% from £1.7 million a year earlier.
James Cropper also said it expects to generate £130 million in revenue in financial 2023, up 24% from £104.9 million the year prior.
‘The company has made significant progress since 2022 in repositioning James Cropper to capitalise on growth opportunities within its core and emerging end-markets,’ it said in a statement.
‘The fast-growing renewable energy and decarbonisation markets are creating an ever-greater need for novel and high-performance materials, while sustainable fibres, and low, or zero, carbon processing are driving growth within paper and packaging.’
James Cropper announced it intended to make three strategic changes: reorganising and renaming its brand profile; ‘a step change’ of investment in innovation and systems; and streamlining its Paper division to improve productivity and margins.
This includes reorganising its three separate divisions of James Cropper Paper, Technical Fibre Products and Colourform into four market-facing segments under the group name: James Cropper Creative Papers; James Cropper Luxury Packaging; James Cropper Technical Fibres; and James Cropper Future Energy.
It said the reorganisation will generate a ‘more focused operation and streamlined cost base with greater collaboration and sharing of functions across the group’. It hopes to deliver the reorganisation and renaming within the remainder of the calendar year.
‘After a year in which the company has faced unprecedented challenges, I am extremely grateful to the whole team for helping to exceed against our revised expectations. However, moving forward, we must continue to be mindful of future headwinds and drive margin improvement,’ said Chief Executive Officer Steve Adams.
‘Our strategic realignment will drive margin improvements by bringing greater focus on our customers and allow us to take better advantage of our size and remain agile and dynamic in our markets. Combined with our wealth of manufacturing knowledge, sustainability alternatives and pioneering abilities we will strengthen our position across multiple sectors as the preferred global partner of choice.’
Chair Mark Cropper added: ‘The next few years should see breakout growth in many areas as we truly live our purpose and help the world shift to a low carbon economy in better balance with nature. Nevertheless, we have become increasingly aware that this will not be achieved without more robust and efficient systems, greater collaboration across our different businesses, and a resizing of our Paper business to make it more consistently profitable and sustainable.’
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